Real gross domestic product (GDP) increased at an annual rate of 2.1 percent in the third quarter of 2021 (table 1), according to the “second” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 6.7 percent.
The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was 2.0 percent. The update primarily reflects upward revisions to personal consumption expenditures (PCE) and private inventory investment (refer to “Updates to GDP”).
COVID-19 Impact on the Third-Quarter 2021 GDP Estimate
The increase in third quarter GDP reflected the continued economic impact of the COVID-19 pandemic. A resurgence of COVID-19 cases resulted in new restrictions and delays in the reopening of establishments in some parts of the country. Government assistance payments in the form of forgivable loans to businesses, grants to state and local governments, and social benefits to households all decreased. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the third quarter because the impacts are generally embedded in source data and cannot be separately identified. For more information, refer to the
and
Federal Recovery Programs and BEA Statistics
.
The increase in real GDP in the third quarter reflected increases in private inventory investment, PCE, state and local government spending, and nonresidential fixed investment that were partly offset by decreases in residential fixed investment, federal government spending, and exports. Imports, which are a subtraction in the calculation of GDP, increased (table 2).
The increase in private inventory investment reflected increases in wholesale trade (led by nondurable goods industries) and in retail trade (led by motor vehicles and parts dealers). The increase in PCE reflected an increase in services that was partly offset by a decrease in goods. Within services, increases were widespread with the largest contributions coming from “other” services (mainly international travel), transportation services, and health care. The decrease in goods primarily reflected a decrease in spending on motor vehicles and parts. The increase in state and local government spending was led by employee compensation (notably, education). The increase in nonresidential fixed investment reflected an increase in intellectual property products (led by software and research and development) that was partly offset by decreases in structures and equipment.
The decrease in residential fixed investment primarily reflected decreases in improvements and in new single-family structures. The decrease in federal government spending primarily reflected a decrease in nondefense spending on intermediate goods and services after the processing and administration of Paycheck Protection Program loan applications by banks on behalf of the federal government ended in the second quarter. The decrease in exports reflected a decrease in goods that was partly offset by an increase in services. The increase in imports primarily reflected an increase in services (led by travel and transport).
The deceleration in real GDP in the third quarter was more than accounted for by a slowdown in PCE. From the second quarter to the third quarter, spending for goods turned down (led by motor vehicles and parts) and services decelerated (led by food services and accommodations).
Current dollar GDP increased 8.1 percent at an annual rate, or $446.0 billion, in the third quarter to a level of $23.19 trillion. In the second quarter, GDP increased 13.4 percent, or $702.8 billion (table 1 and table 3). More information on the source data that underlie the estimates is available in the “Key Source Data and Assumptions” file (available at 10 A.M.) on BEA’s website.
The price index for gross domestic purchases increased 5.5 percent in the third quarter, compared with an increase of 5.8 percent in the second quarter (table 4). The PCE price index increased 5.3 percent, compared with an increase of 6.5 percent. Excluding food and energy prices, the PCE price index increased 4.5 percent, compared with an increase of 6.1 percent.
Gross Domestic income and Corporate Profits
Real gross domestic income (GDI) increased 6.7 percent in the third quarter, compared with an increase of 4.3 percent (revised) in the second quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 4.4 percent in the third quarter, compared with an increase of 5.5 percent in the second quarter (table 1).
Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $121.4 billion in the third quarter, compared with an increase of $267.8 billion in the second quarter (table 10).
Profits of domestic financial corporations increased $13.7 billion in the third quarter, compared with an increase of $52.8 billion in the second quarter. Profits of domestic nonfinancial corporations increased $67.5 billion, compared with an increase of $221.3 billion. Rest-of-the-world profits increased $40.1 billion, in contrast to a decrease of $6.2 billion. In the third quarter, receipts increased $43.1 billion, and payments increased $3.0 billion.
Updates to GDP
In the second estimate for the third quarter, real GDP increased 2.1 percent, 0.1 percentage point higher than in the advance estimate. Upward revisions to PCE, private inventory investment, and state and local government spending were partly offset by downward revisions to exports, nonresidential fixed investment, residential fixed investment, and federal government spending. Imports, which are a subtraction in the calculation of GDP, were revised down. For more information, refer to the Technical Note and the “Additional Information” section that follows.
| Advance Estimate | Second Estimate | |
|---|---|---|
| (Percent change from preceding quarter) | ||
| Real GDP | 2.0 | 2.1 |
| Current-dollar GDP | 7.8 | 8.1 |
| Real GDI | … | 6.7 |
| Average of Real GDP and Real GDI | … | 4.4 |
| Gross domestic purchases price index | 5.4 | 5.5 |
| PCE price index | 5.3 | 5.3 |
| PCE price index excluding food and energy | 4.5 | 4.5 |
Updates to Second-Quarter Wages and Salaries
In addition to presenting updated estimates for the third quarter, today’s release presents revised estimates of second-quarter wages and salaries, personal taxes, and contributions for government social insurance, based on updated data from the Bureau of Labor Statistics Quarterly Census of Employment and Wages program. Wages and salaries are now estimated to have increased $301.1 billion in the second quarter, an upward revision of $101.3 billion. Personal current taxes are now estimated to have increased $120.4 billion, an upward revision of $17.7 billion. Contributions for government social insurance are now estimated to have increased $38.4 billion, an upward revision of $13.5 billion. With the incorporation of these new data, real gross domestic income is now estimated to have increased 4.3 percent in the second quarter, an upward revision of 2.0 percentage points from the previously published estimate.
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Next release, December 22, 2021 at 8:30 A.M. EST
Gross Domestic Product (Third Estimate)
Gross Domestic Product by Industry
Corporate Profits (Revised Estimate)
Third Quarter 2021
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| Release Dates in 2021 | ||||
|---|---|---|---|---|
| Estimate | 2021 Q4 and Year 2021 |
2022 Q1 | 2022 Q2 | 2022 Q3 |
| Gross Domestic Product | ||||
| Advance Estimate | January 27, 2022 | April 28, 2022 | July 28, 2022 | October 27, 2022 |
| Second Estimate | February 24, 2022 | May 26, 2022 | August 25, 2022 | November 30, 2022 |
| Third Estimate | March 30, 2022 | June 29, 2022 | September 29, 2022 | December 22, 2022 |
|
Gross Domestic Product by Industry |
March 30, 2022 | June 29, 2022 | September 29, 2022 | December 22, 2022 |
| Corporate Profits | ||||
| Preliminary Estimate | — | May 26, 2022 | August 25, 2022 | November 30, 2022 |
| Revised Estimate | March 30, 2022 | June 29, 2022 | September 29, 2022 | December 22, 2022 |